Key Takeaways
- President Donald Trump’s trade war could make holiday shopping especially expensive for parents of young children.
- The 145% tariff on Chinese goods could raise the price of toys. More than three-fourths of toys sold in the U.S. are made in China.
- Toy manufacturers say higher prices and shortages are in store this holiday season if tariffs stay in place.
President Donald Trump’s trade war with China could hit the wallets of families with young children especially hard, more than doubling prices for goods imported from the world’s biggest toy workshop.
This week, Trump raised tariffs on Chinese products to 145% as the trade war between the world’s two economic superpowers heated up. Should those tariffs stick, import taxes could make holiday shopping much more costly since 77% of all toys purchased in the U.S. are made in China, according to the Atlantic Council think tank, citing data from Comtrade and the International Trade Center.
“Buy your kids’ Christmas presents today because it’s going to have a huge impact on the price of toys,” economist John Veitch, dean of the School of Business and Management at Notre Dame de Namur University, told Investopedia in an interview.
Some manufacturers of popular toys have already warned of potential price increases. Mattel, makers of Barbie dolls, previously said they would have to raise prices in response to the 20% tariff on China Trump announced in February.
Reuters reported that the toymaker is reportedly moving some of its production from China to Vietnam, India, and Indonesia but will still make more than 60% of its products in China after the move. The other three Southeast Asian countries also face high tariffs under Trump’s “Liberation Day” tariffs announced earlier this month, although that levy has been suspended for 90 days.
The tariffs could hit other popular toys, including Lego, which makes its bricks in Denmark and opened a factory in Vietnam this week. At a minimum, Lego importers would have to pay the 10% global tariff that Trump announced alongside the country-specific “reciprocal” tariffs. Lego is opening a factory in the U.S., but it’s not scheduled to begin production until 2027.
Overall, the broad range of tariffs implemented by the Trump administration could push up prices on a multitude of consumer products. A typical family will have to pay $4,689 extra per year for the things they buy, according to the latest estimate from the Yale Budget Lab, which has tracked the impact of the tariffs.
That impact won’t be spread evenly, though, and could make holiday shopping especially difficult for parents. Jay Foreman, CEO of Tonka truck and Care Bear manufacturer Basic Fun Toys, told The Today Show that a 125% tariff on Chinese products would force him to raise the price of a $30 truck to $70 and that there would likely be a toy shortage this Christmas if the tariffs stay in place.
“There are no factories in the United States making the type of toys we manufacture,” he said.